800 ways taxpayer money supports fossil fuels

The measures were worth $167 billion last year for the oil, natural gas and coal industries, according to the Organization for Economic Cooperation and Development.Bloomberg | September 23, 2015, 08:02 IST

NEW YORK: As world leaders converge at New York for a United Nations gathering that's expected to have a strong emphasis on climate change, the OECD is pointing out 800 ways rich industrial nations support fossil fuels with taxpayer money, along with a handful of countries that are catching up quickly. The measures were worth $167 billion last year for the oil, natural gas and coal industries, according to the Organization for Economic Cooperation and Development, a Paris-based institution that advises 34 industrial nations. While that number has fallen from almost $200 billion in 2012, it easily exceeds the value of subsidies for renewables such as wind and solar.

The findings released on Monday are designed to stimulate debate on what constitutes fair support for energy technologies. World leaders including US President Barack Obama and his Chinese counterpart Xi Jinping are attempting to ratchet up ambitions for a global deal reducing greenhouse gas pol lution. "We're totally schizophrenic," Angel Gurria, OECD's secretary-general, said in Paris on Monday. "We're trying to reduce emissions, and we subsidise the consumption of fossil fuels. These policies are not obsolete; they're dangerous legacies of a bygone era when pollution was viewed as a tolera ble side effect of economic growth."

The report covered OECD member nations plus six developing economies outside the group ­ Brazil, China, India, Indonesia, Russia and South Africa. It expands on a 2013 assessment and on the work of the International Energy Agency, which put the cost of fossil fuel subsidies at $548 billion in 2013, down 25% from the year before. BIGGEST SUBSIDISERS The IEA report includes countries from the Middle East and Africa such as Qatar, Iran and Nigeria that top other rankings of big subsidisers. It looked at how consumer prices vary from market prices, while the OECD looked specifically at measures in national budgets that support fossil fuels.

"If other developing countries were included, then the total would be much higher," said Angus McCrone, senior analyst at Bloom berg New Energy Finance in London. "The reassuring point from the OECD report is that although it found attempts to reduce fossilfuel subsidies running into inertia, it also concluded that support is now on a downward trend."

Renewable energy subsidies rose 15% to $121 billion in 2013 and may rise to $230 billion by 2030, according to an IEA report released last year. The measures counted by the OECD covered some of the most obscure pieces of national tax codes ­ including direct controls on gasoline prices, depreciation allowances for oil drillers, breaks for refiners, credits for infrastructure such as pipelines and stimulus for technology used to clean up coal emissions.